The number of dead in China's worst rail disaster in a decade has gone from 66 to at least 70 and could rise further, according to the official Xinhua news agency.

Another 420 passengers were injured, 70 of them critically, when a high-speed train from Beijing to the seaside resort of Qingdao jumped the tracks early in the morning and hit a second train. Ten carriages plunged into a ditch.

The second train, heading from nearby Yantai to Jiangsu province, was derailed in the collision, which occurred in a rural area outside Zibo city in Shandong province.

Xinhua said investigators had ruled out terrorism as the cause of the crash. The agency's English-language report blamed human error, while its Chinese report attributed the crash to negligence without giving other details.

Within hours the authorities had sacked the former director and party secretary of the Jinan railway bureau. State media said both officials were under investigation by the ministry of railways.

The local Qilu evening news said the railway had begun operating a new timetable last week. State television said the line, built in 1897, was due to be retired ahead of the Olympics in favour of a high-speed link. Qingdao is to host the sailing events.

The crash is the second major rail accident in Shandong province this year. In January, a high-speed train hit and killed 18 workers as they maintained a stretch of track near the city of Anqiu.

It is China's worst rail crash since 1997, when more than 100 people died in a collision in the central province of Hunan.

The Chinese rail system is generally regarded as having a good safety record, particularly given the strains imposed by the large volume of travellers and freight. Last year it carried 1.36 billion passengers, only slightly fewer than India's record.

Most of those on board would have been asleep when the train crashed at 4.40am (11.40pm BST).

News footage showed rescuers pulling passengers from a carriage lying on its side. Survivors wrapped in white bedsheets stood or sat near the wreckage.

One 38-year-old passenger told Xinhua that she escaped with her 13-year-old daughter through a large crack in the floor of their carriage. "We were still sleeping when the accident occurred," she said. "I suddenly woke up when I felt the train stopped with a jolt. In a minute or two, it started off again, but soon toppled."

Xinhua said bloodstained sheets and broken vacuum flasks were scattered near the wreckage.

A doctor at the emergency clinic of the Zibo central hospital said all major hospitals in the area were treating the injured.

The railways minister, Liu Zhijun, reached the site early in the morning. Xinhua said the president, Hu Jintao, had sent the vice-premier, Zhang Dejiang, to the scene, and officials had set up nine hotels and 34 rescue centres for victims and their families.

The accident puts extra strain on the rail system leading up to the busy May Day holiday period and has already caused some delays, rail workers said.

China has spent £50bn on expanding and upgrading its railways over the past few years.